ANALYSIS OF CREDIT UTILIZATION BEHAVIOR OF SMALL SCALE BUSINESS FARMERS IN BOSSO LOCAL GOVERNMENT AREA OF NIGER STATE, NIGERIA

This study analyses the credit utilization behavior of small scale farmers in Bosso Local Government Area of Niger state. The main objectives of the study include the identification of the various formal and informal sources of credit, pattern of their utilization by farmers as well as the examination of the effect of credit allocation on the value of output. Primary data used for the study were obtained using structured questionnaire administered to 60 purposively selected farmers. Descriptive statistics and regression analysis were used to analyze the data. Result shows that most of the farmers (95.0%) were married and ownership of farmland was mainly through inheritance. Results of the regression analysis gave R² value of 0.684. This indicates that 68.4% of the variation in Y (value of output) was explained by the independent variables (X₁ – X₅) include in the model. Three (3) out of the five (5) variables in the model were found to be statistically significant in explaining total value of output. This include X₃ (amount allocated to other inputs), X₄ (amount allocated to equipment) and X₅ (amount allocated to land). High interest rate, inadequate credit and late arrival of credit were identified by the farmers, as some of the constraints encountered in accessing credit. It was however, recommended that timelines of loan disbursement will reduce its diversion to other non farm uses. Interest rates charged by banks should be reduced to enable farmers’ access it profitably.